Privatization: economic opportunity and public health.
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Biomedical subjects
Publications and source records attributed to S S Sharfstein.
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The private practice of psychiatry is being transformed by the new economics of medical care. Patients are paying more out-of-pocket for necessary care (demand-side cost sharing), and health care providers are being asked to assume part of the risk of treatment through prospective payment (supply-side cost sharing). Specific survival strategies for psychiatrists in private practice include development of a balanced practice, expansion of referral networks, participation in alternative delivery systems such as health maintenance organizations and preferred provider organizations, active involvement in utilization and claims review, participation in outcome studies, and expansion of patient care advocacy and community involvement.
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In the search for cost efficiency, psychiatric patients are experiencing greater restrictions on their insurance benefits. Managed psychiatric care may provide a useful alternative to arbitrary benefit limits, but may also interfere with treatment, especially if there is a disagreement between the manager and the responsible clinician. Three clinical vignettes are presented and the implications of possible premature discharge described as a first step in building a research agenda on the clinical consequences of managed psychiatric care.
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The authors analyzed data from the U.S. Bureau of Labor Statistics Level of Benefits Surveys for the period 1979-1984 to examine coverage for psychiatric disorders in the private sector. While the overall number of employees with psychiatric benefits has increased, a greater percentage have more restrictions on those benefits. The extent of coverage is wide ranging, but there is little depth and the majority of psychiatric care expenses are not insured. Although the figures do not suggest a dramatic cutback in insurance coverage, the trends toward increased reductions in benefits for all health care threaten the more vulnerable psychiatric benefits.
Psychiatric units in general hospitals are exempt from diagnosis-related groups (DRGs), a system of per case prospective payment that is used for the majority of patients covered by Medicare. The American Psychiatric Association purchased a large hospital discharge data base and studied the potential impact of DRGs on psychiatric patients and inpatient psychiatric units in general hospitals. There was substantial inaccuracy in the psychiatric DRGs' prediction of resource use, which could lead to inappropriate discharge of patients and financial risk to hospitals that treat more severe cases. The authors advocate further research because psychiatry must anticipate prospective payment in the future.
The earnings of psychiatrists are substantially lower than the earnings of physicians in procedurally oriented and surgical specialties of medicine. The authors offer evidence, however, that when it is compared to other cognitive medical specialties, such as pediatrics and internal medicine, psychiatry is the highest paid specialty on an hourly basis. In recent years, psychiatrists' income has improved, largely because of enhanced productivity and efficiency, diversification of treatments, work in multiple settings, the expansion of group practice, and subspecialization. The authors provide an optimistic perspective on the future of psychiatry as a medical specialty.
The estimated 1.7 to 2.4 million Americans who suffer from chronic mental illness are poorly served by the current nonsystem of services. No agency at any level is responsible for coordination of funding, treatment, and care. Since the mid-1950s funding has become increasingly fragmented as state mental hospitals have been depopulated, community services have been developed, and federal entitlement programs such as Medicaid, Medicare, and Social Security Disability Insurance have been introduced. To overcome the problems of fragmented funding and uncoordinated services, the authors propose establishment of a new federal entitlement program for the chronic mentally ill that would pool all existing funds regardless of the source. States would be empowered to develop a single administrative agency with responsibility for coordinating a comprehensive program of services.
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The authors review several methods for enhancing the clinical utility of psychiatric diagnostic formulations and their value in predicting resource consumption. They suggest incorporating the concept of severity of illness in a comprehensive diagnostic formulation, using an extended coding schema that includes a rating of severity. Other modifications of DSM-III axes are proposed.
Many studies have shown that there are cost-effective alternatives to 24-hour hospital care. The new era of medical economics emphasizes prospective payment and alternative delivery systems. This provides new opportunities for psychiatric patients to receive appropriate care outside the traditional inpatient context.
Escalating costs of medical and psychiatric care have prompted a reevaluation of the health care delivery system and practice styles. There are several "procompetition" or market-based solutions that seek to make the consumer of care more price conscious and the provider of care more cost conscious. Diagnosis-related groups (DRGs), preferred provider organizations (PPOs), the growth of for-profit hospital systems, and the expansion of health maintenance organizations (HMOs) are reshaping the organization and financing of psychiatric care. Psychiatry's adaptation to the new medical economics must emphasize the quality of patient care.
The providers of mental health care have been the focus of blame for the increases in the cost of financing this care. The authors point out that the role of these providers cannot be isolated from the types of services they provide, where they are provided, to whom, and how much care is made available. They recommend that professionals and third-party payers work together on these variables and determine how best to contain the cost of the most appropriate mental health care.
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